Moving Your Fundraising From the Emergency Room to the Wellness Clinic

No one wants to be in the emergency room. No one. It's a place where the desperately ill and seriously injured can receive the immediate attention they need. The wellness clinic — the place where we go to reduce the need for an emergency room — is a much more desirable place to be.

Many nonprofits have taken up semi-permanent residence in a sort of financial emergency room. Lurching from acute condition to near crisis and back again, they don't see a way out. The deep irony is that this crippling cycle can be avoided — entirely.

Nonprofit financial nirvana is a steady, predictable stream of revenue — a revenue stream that is sufficient to meet immediate operating needs while scaling, enabling the organization to grow and prosper, becoming ever more effective in delivering its essential mission.

Unfortunately, very few of the nation's 1.5 million charitable organizations ever attain this — or get even close. Only a third have the minimum cash reserve considered essential for baseline financial stability, six months.

You are on the front lines of this struggle. As a fundraiser, you are often the one charged with saving the day (or else!).

In the coming weeks, we'll explore what it means to be either in the financial emergency room or the wellness clinic, and how to avoid going to the former while making meaningful visits to the latter.

Nonprofits derive their revenue from a variety of sources. Fee-for-service, which includes gate fees, membership dues, contract research, medical and social services. Public funding with direct grants, either block or program-specific, is another source. Income from an ancillary business enterprise either wholly or partially owned is another stream of revenue.

Finally, there's philanthropy. Sooner or later, it comes down to fundraising. There's the dreaded word. How much and how often will vary from organization to organization, but fundraising is almost always a component of a nonprofit's revenue mix. For many, if not most, it is the critical component.

The subject of fundraising is broad and deep. We'll focus our gaze on those aspects that relate to developing a sustainable stream of philanthropic revenue, which scales over time.

The current state of financial affairs for nonprofits is both regrettable and avoidable. While other revenue sources plateau and even decline, philanthropy remains the source that holds considerable untapped potential. Despite this, far too many nonprofits struggle in their fundraising efforts. Even those organizations that aren't on the financial edge often have woefully underperforming fundraising programs.

What's to be done? The solution lies in making a fundamental change in the way in which nonprofit fundraising is conducted. That shift is moving away from a model dependent on short-term, urgent efforts to one that anticipates need — both of the organization and of the philanthropist.

Impossible, you say? I don't think so. Every challenge, whether simple or substantial, comprises incremental steps, taken with a relentless focus on the ultimate goal.

I want to hear from you about the very real and practical challenges you face in building fundraising programs that are both sustainable and scalable (info@TheEightPrinciples.com). I'll give you a quick response, and I'll choose some of these thorny obstacles to share, along with my insights, in upcoming columns.

Whether your organization is small or large, well-heeled or struggling from day to day, you'll benefit immeasurably from taking a good, hard look at whether your organization spends more of its time in the fundraising emergency room or makes planned visits to the wellness clinic. You'll learn what sends you to the emergency room and how not to go there — anymore than you absolutely must.

We'll be tackling the real and practical issues you face in creating a revenue stream that enables your organization fulfill its mission and its aspirations. I firmly believe that sustainable, scalable philanthropic revenue is within the reach of every nonprofit organization.

Larry believes in the power of relationships and the power of philanthropy to create a better place and transform lives.

Larry is the founder of The Eight Principles. His mission is to give nonprofits and philanthropists alike the opportunity to achieve their shared visions. With more than 25 years of experience in charitable fundraising and philanthropy, Larry knows that financial sustainability and scalability is possible for any nonprofit organization or charitable cause and is dependent on neither size nor resources but instead with the commitment to create a shared vision.

Larry is the author of the award-wining book, "The Eight Principles of Sustainable Fundraising." He is the Association of Fundraising Professionals' 2010 Outstanding Development Executive and has ranked in the Top 15 Fundraising Consultants in the United States by the Wall Street Business Network.

Larry is the creator of the revolutionary online fundraising training platform, The Oracle League.